An increase in capital outflows from Canada will
A)decrease the balance on the financial account.
B)increase the balance on the financial account.
C)decrease the balance on the capital account.
D)increase the balance on the current account.
E)increase the balance on the capital account.

Question

Quizplus · Accepted Answer

An increase in capital outflows from Canada means that more Canadian capital is being invested abroad. This is recorded as a negative in the financial account (not the capital account, as per the older terminology) of the balance of payments, thus decreasing the balance on the financial account.

An Increase in Capital Outflows from Canada Will